Asian stocks rise as easing US-Iran tensions lift investor sentiment

Asian stocks climbed on Thursday September 3, tracking gains on Wall Street, as easing tensions between the United States and Iran lifted investor sentiment across the region.

The MSCI Asia Pacific equities gauge rose 0.5%, with Japanese and South Korean benchmarks among the gainers. The Kospi added 0.56%, while the Topix climbed 0.67%.

The Nikkei, however, slipped 0.25%, bucking the broader regional trend. Hang Seng futures pointed 0.5% higher.

In addition, the GIFT Nifty is trading over 90 points higher, indicating a gap-up start.

Also Read: Explained - Three major reasons why the Dow Jones gained 300 points on Wednesday

The advance followed a stronger session in the US, where the S&P 500 broke a three-day losing streak and the Nasdaq 100 edged up 0.2%. Technology stocks remained in the spotlight after Broadcom forecast a surge in demand for artificial intelligence chips over the next two years.

Oil prices retreated after President Donald Trump downplayed fears of an extended confrontation with Iran. He said any fresh strikes on Iran were unlikely to last long and repeated his assertion that Washington held sway over the Strait of Hormuz, a vital route for global crude shipments.

Brent crude fell 0.6% to $95.10 a barrel, while West Texas Intermediate dropped 0.4% to $90.66 a barrel.

The pullback in oil also supported bonds during the US trading session, dragging US Treasury yields down from the multi-year highs they had touched earlier in the week.

Currency markets kept a close watch on the Japanese yen after its sharp rally in New York trading, where it touched 158.22 per dollar before easing back.

The Japanese currency traded around 158.83 to 158.86 per dollar in early Asian dealing on Thursday. Traders stayed alert to the possibility of fresh intervention by Japanese authorities should the currency swing sharply again.

The offshore yuan held steady at 6.7174 per dollar.

The improved mood marked a turnaround from the start of September, when renewed fighting in Iran had pushed oil higher and driven global bond yields up, stoking inflation worries and strengthening expectations of a Federal Reserve rate hike this month.

With the corporate earnings season largely concluded, investors now seem to be turning their attention to Friday's US jobs report, which is expected to offer fresh signals on the health of the country's economy and how it would influence the Fed's likely policy path.